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Welcome to another edition of the Chicks
on the Right podcast, where we talk

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to our BFF and sponsors, Zach
Abraham from Bulwart Capital Management, who always

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gives us fantastic advice and information about
what's going on in the financial world and

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in the markets and all of those
things. And Zach, today we're a

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little freaked out. So the world
feels like it's ending. We just watched

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that horrible Barack and Michelle Obama show
on Netflix, Leave the Lead, the

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World Behind or something. Have you
seen? No, No, don't watch

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it. Just down Okay, don't
tell all your friends to stay away from

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it. Just don't watch it.
It's just horrible. But it's one of

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those apocalyptic dystopian like everything is falling
apart, the world is ending kind of

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movies, and so, you know, you see something like that, it

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kind of puts you on edge for
a few days. And one of the

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things that we talked about together before
we went live in our own podcast this

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morning was just how like uneasy we're
feeling, and that extends to our sort

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of financial world as well. And
so something that I did, like I

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don't know a year ago, I
think at this point was I got this

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Burr where I was like, I
have to withdraw money from the bank and

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just have it in cash in a
safe in my house. And I did

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that, and so then that got
us to talking. What is your advice

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for helping people prepare for disaster's financial
Yeah, because I will tell you that

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like with my kids, my older
kids. I have a thirty four year

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old and a thirty year old.
Like one of the things that I've told

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my boy specifically, like when you
graduated college, I was like, cash,

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cash is like really good. You
need to make sure you have cash

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on hand, Like when all the
shit hits the fan, you gotta make

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sure you have some cash. But
is that bad advice? Like now I'm

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starting to think that's terrible advice.
I'm a terrible mother. I gave him

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like the worst advice ever, Like, was I terrible mom? Zach the

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wrong? So you know, I
think, like anything else, it comes

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down to amounts and percentages and all
that other kind of stuff. Right,

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So I think that, and I
think there's a lot of good examples to

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back this up. I think that
for the average family, you know,

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if you're able to, I think
having five to ten thousand dollars a cash

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on hand is not a bad idea, But I think that the one caveat

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I would throw in there is that
we really need to update what our definition

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of a financial disaster is because when
we need to look, and I think

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the easiest way to do is to
look back in history when we talk financial

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disasters, I think the number one
thing that we're all talking about are like

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an eighth nine great depressionary reducts where
things drop. I think that we all

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need to accept the fact that while
that will happen, and as a matter

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of fact, I think that you're
probably going to look I will be shocked

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if you do not see a sharp
lead down stock market next year. And

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it doesn't mean that has to plummet, but I think giving back the majority

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of what it made this year because
it's nonsensical and that kind of fits our

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outlook anyway. I just I think
that you're probably going to be range bound

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here for a while, and I
you know, you get to the bottom

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of the range and everybody's going to
freak out the world's ending, and get

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to the top of the range,
everybody's all excited again, and you just

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keep doing it, and we've done
it. Is the third time we've done

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it. So but I think that
everybody needs to adjust to something. Meaning

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when we went through COVID, in
my opinion, the game changed. And

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the reason I say the game changed
is the stock market was up sixteen and

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a half percent in the same year, where you add a twenty three point

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eight percent annualized drop in economic output
in a single quarter right during the COVID

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shutdown. To put that in perspective, in eighth nine, the Great Financial

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Crisis, the economy contracted three point
eight percent top to bottom. COVID we

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were twenty three point eight in a
quarter. Okay, the stock market went

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up sixteen percent. Why because they
made it rain. You're so far down

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the path now, you're not going
to see a depression You're not going to

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see a stock market that goes down
eighty five percent. The fear is a

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Zimbabwe type situation. And look,
we're not on the edge of that either,

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okay. Like so, you know, if we got to that point,

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you would see Europe blow up first, you would see China blow up

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first. There are other places that
are even worse soft than we are.

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But we all need to adjust our
thinking a little bit and define what is

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And the easiest way I think to
look at this, you guys, is

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what happened in the Great Depression,
and what happened in eight oh nine is

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called deflation. Right, where the
value of a currency goes up versus goods.

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Now, it doesn't ever feel good
because we all own goods and own

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assets, and then by default,
if the dollars going up in value,

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they're going down. Right. So
those are what we've experienced. But what's

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really interesting is do you know of
another single civilization in the history of mankind

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that went away or collapsed because their
currency went up too much in value?

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Right? The answer is no.
Right. What creates societal collapse its currency

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collapses, which means what happens to
asset prices, They go through the roof.

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Right. The best performing stock market
in my lifetime has been the Zimbabwe

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stock market. I think it's averaged
like, I don't like six seven hundred

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percent a year. Now. The
problem is is that it's currency was depreciating

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by eight or nine hundred percent a
year, right, So what I'm saying

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is we need to redefine it.
The government, especially since eight oh nine,

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certainly since COVID has changed the rules, they have decided that extended or

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protracted or elongated or whatever however you
want. Economic downturns are no longer politically

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palatable, and we don't care how
much money we have to print. We

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don't care how much debt we And
the simple reason for this is is is

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pretty self evident. Meaning if you
print a bowload of money and we're seeing

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it happen in our and you generate
forty year high inflation, you can still

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get reelect. But if you allow
things to go down in price, and

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you allow stock market crashes, they're
going to throw you out right. As

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long as their nasdak companies and their
bitcoins going up, everybody's fine, even

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if they're dealing with inflation. So
I think that we need to recalculate what

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we're looking at. So to answer
the question directly, I think having five

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to ten thousand dollars cash on hand
makes all the sense in the world.

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But I look at that a sort
of get out of town money, meaning,

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you know, don't make it a
pile and think about it this way.

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You know, we're worried about the
collapse of the dollars, so we're

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going to pull all of our money
out in cash and sit in dollars does

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make a lot of sense. Okay, Well, and I know that when

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I went to the bank to even
like it was such a good deal to

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go and ask for my own money. My gosh, I can imagine.

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Oh yeah, oh my god.
You go into a bank and you ask

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for a significant amount of money in
cash and it is like they are on

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guard and they don't like it,
and it's yeah, yeah, yeah,

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I know. It's why do you
need forty thousand dollars? And I'm like,

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because I deposit it, Well,
that wasn't anywhere close. Yeah,

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even like five even like if you
want to get five thousand, like if

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from a bank, they if you're
trying to do a down payment on something,

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or like even for just a huge
purchase like a home or a car

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or something like that, they don't
You're right. They make a big fuss

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about it. It takes so much, and you're like, this is my

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mother, I know I need a
reason actually right right, yeah, yeah,

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The reason is because it's Tuesday afternoon
and I want my bloody yeah right.

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Meanwhile, some guys, waw,
some guy in Russia can hack into

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your account and get it in like
two seconds and you're like, wait a

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second, nobody asks to yeah yeah, geez yeah, or or or they

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just if they're really smart, they
don't even need to hack anymore. They

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just need to line themselves with some
Ukrainian politicians and they'll just you know,

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they'll flow the money in your bank
account for you, big right, big

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yeah. Yeah. There is there
like a percentage though, just for because

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people that are listening potentially have income
levels all over the place. So is

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there like a rule of thumb amount
of cash to have on hand that is

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a percentage of what you would typically
have in a savings account. Not really,

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but I would say generally, I
think having amount of cash on hand

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to facilitate all of your financial needs, including potentially paying bills for a month,

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So figuring out what that amount is
for a month, because like I

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said, we've just we have.
I was having this conversation with client earlier

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today, so it's fresh in my
mind. We just have to change the

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way we're thinking and identify the risks
properly, meaning it sounds crazy, and

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eventually, you know, this dynamic
will change, because all dynamics do.

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But like I said, we have
we the other thing that we need to

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fully accept is we do not live
in a free market society anymore. Meaning

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government has decided that they want and
the Federal Reserve has decided that they want

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to target asset prices right, which
means what it means, it's on a

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free market. And what do politicians
benefit from They benefit from things going up.

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So we've changed policy to match that
as well, which is one of

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the reasons we've told our clients.
Look, I think you need to manage

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risk and I think you need to
be very careful because of valuations in the

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environment that we currently live in.
Here's the other thing, me sitting there

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saying the stock market isn't going to
drop eighty five percent. I don't mean

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your account can't, right Like I
can show you all kinds of things that

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have gone down eighty to ninety percent
over the last two years. I'm just

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saying. Which is why I think
people and it's why it's so pernicious right

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now, is the average retail investor
is loaded up on the most ridiculous stuff.

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And the reason why is because that's
the stuff that's performed the best.

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So it's drawn them, you know, it's drawn people into it. People

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love chasing charts and things like that. So just because I say that that's

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not gonnappen to the stock market,
and I know there's people that are here

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there be like he's a Pollyanna,
and I'm like, no, I again,

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go back to COVID, right,
A twenty three point eight percent hit,

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and that's never happened before. That's
so that's that's that's you know,

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I think the worst quarter in the
Great Depression, you were down like six

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percent, right, So I mean
to put that in context and to sit

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there and see that we can take
that level of economic shock, we print

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a bunch of money and still finish
with the stock market up sixteen percent.

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People need to realize that. So
where we're looking at it, and we're

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going to look I think the market's
going to give us a lot of opportunities.

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And I think next year is going
to be one of those opportunities where

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things are going to get hit,
but it's going to be an opportunity to

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buy other good things because the inflationary
game is going to keep going on and

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keep going on in earnest. So
I would say, you know, a

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month, a month of cash sitting
on hand is a good idea. I

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think, and I think that's kind
of a backstop. But but do you

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know the other thing you don't want
to do. Another alternative is not to

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sell every you know, every stock
or every asset you own and buy a

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bunch of roles and sticking in a
safe either same issue. So anyway,

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Yeah, a month of cash on
hand, as I think, is all

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you need to do. And then
I think the other big important thing you

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need to do is just properly manage
the risk. And the best way for

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people to do that is to make
sure that they are following you. Yeah,

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so best. So we put out
a fifteen minute twenty minute show every

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single day called Daily Dots talking about
all the important information that's occurred in the

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economy they can and then we do
our weekly show so they can get all

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00:11:33,279 --> 00:11:37,440
of that for free, no paywallet. Know Your Risk Radio podcast and we're

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00:11:37,440 --> 00:11:39,799
on every podcasting site, same place
they listen to your guys' podcasts. They

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00:11:39,840 --> 00:11:43,000
can type in Know your Risk Radio, pull us upto. Awesome, perfect,

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fantastic, thank you, thanks so
appreciated. We have a wonderful week

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00:11:48,600 --> 00:11:54,600
and thanks for having me on week. Investment advisory services offered through Trek Financial

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LLC and sec registered investment advisor.
Information presented is for educational purposes only.

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advice. Does not take into consideration your

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00:12:01,960 --> 00:12:05,000
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to make an offer or solicitation for the

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sale or purchase of any securities or
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